Who said market runs on banks were a 2008 affair?
Commerzbank was pummelled in Frankfurt on Thursday after this report in our erstwhile sister-publication, Financial Times Deutschland:
Exklusiv Coba braucht frische 10 Milliarden
Basically, the report states that Commerzbank needs a further €10bn of capital from the state rescue fund, Soffin – on top of the €8.2bn provided last year. The move is needed to cover the risks associated with the takeover of Dresdner, which is due to complete later this month.
How smart was Allianz to off-load Dresdner when it did (a week before Lehman went under)? Even if the deal had to be re-set and, as FTD now suggests, German regulators have also decided that Allianz itself needs to re-absorb a further €1.8bn of toxic Dresdner paper.
Shares in Commerzbank were 18 per cent lower mid-afternoon on Thursday.
Suddenly, all those stories of a second -round rescue in the UK don’t sound so alarmist.
Update: GERMAN GOVERNMENT TO GET 25% STAKE IN COMMERZBANK, WELT SAYS
Update II: Commerzbank statememt
Related links:
Capitalising on cycles – FT Alphaville
German bank merger under pressure – FT